State Treasurer Duane Davidson last week told the Association of Washington Business Lobby Lunch that the state is not prepared for the inevitable downturn. (Reserve discussion begins about 8:50.)
“We’ve got growth that’s unprecedented, in the country,” Davidson said. “…And yet we continue to tamper with transfers out of the rainy-day fund.” The Government Finance Officers Association generally recommends that state and local governments set aside 15 percent or at least three months of general fund spending in case of a downturn, he noted.
“We’re not there yet,” he said. And there will be a recession, he added, it’s just a matter of when.
“And I don’t think right now, the state is equipped, basically, to face that,” he said.
With three-quarters of business economists predicting a recession in the next two years, the coming slowdown should be at the forefront of state lawmakers’ budget considerations.